NRI inheriting Indian property, tax + FEMA + mutation in one guide.

• India abolished estate duty in 1985. No inheritance tax / estate tax on Indian assets.
• Section 56(2)(x) specifically exempts gifts under will or by way of inheritance — inherited property is not treated as 'Income from Other Sources' in NRI's hands.
• No immediate tax liability at the time of inheritance. The property / asset moves into NRI's hands at its historical cost (for later capital gains purposes under Section 49(1): cost = cost in previous owner's hands + period held by previous owner counted for holding-period calculation).
• Income from inherited property is taxable in NRI's hands post-inheritance: rental income, interest on inherited FD, dividend on inherited shares.
• US estate tax: if NRI is US tax person, inherited Indian assets may be included in US estate for US estate tax purposes on NRI's own death — separate planning needed. See our US estate tax guide.

1. Death certificate: obtain from Municipal Corporation / Panchayat.
2. If deceased left a Will (testamentary succession):
3.   — Original Will + witness confirmation.
4.   — Probate from Indian High Court if (a) deceased was Christian / Parsi / Jew, or (b) immovable property in Mumbai / Chennai / Kolkata (mandatory jurisdictional probate requirement). Elsewhere, probate optional for Hindu / Muslim / Sikh / Jain testators but strengthens title.
5.   — Timeline: 6-24 months for probate.
6. If no Will (intestate succession):
7.   — Hindu Succession Act 1956 for Hindu / Buddhist / Jain / Sikh.
8.   — Indian Succession Act 1925 for Christian / Parsi / Jew.
9.   — Muslim Personal Law for Muslim.
10.   — Succession Certificate from District Court (for movable assets — bank balance, shares).
11.   — Legal Heir Certificate from Revenue Authority (for immovable property mutation).
12.   — Timeline: 6-18 months.
13. Mutation (immovable property): application to Municipal Corporation / Revenue Department with death certificate + Will / Succession Certificate / Legal Heir Certificate + NOC from co-heirs + property documents. Mutation updates municipal records to NRI's name.
14. Bank / demat / MF transfer: with Succession Certificate + ID documents.
15. NRO account: NRI should have NRO account to hold inherited Indian funds. Operations limited to local use + repatriation under FEMA.

• Inherited property / funds held in NRO account: fully permissible under FEMA.
• Repatriation of inherited funds abroad: NRI can repatriate up to USD 1 million per FY (combined limit for all remittances from NRO / inheritance / sale proceeds) under FEMA Current Account Rules + Schedule III. Requires Form A2 declaration + Form 15CA + 15CB (CA certificate).
• Documents for repatriation: proof of inheritance (Will / probate / succession certificate), source documentation (bank statements showing credit), tax clearance (ITR / assessment order where income involved).
• Beyond USD 1M/year: requires RBI prior approval under FEMA Current Account Rules.
• Inherited immovable property: can be held by NRI indefinitely. Sale proceeds repatriable up to USD 1M/year.
• Agricultural land / plantation / farmhouse: NRI can INHERIT but cannot BUY. Can hold inherited agricultural land but with restrictions on sale (sale only to Indian resident).

• Capital gain calculation: sale price - indexed cost (indexation from original acquisition date by previous owner per Section 49(1) + Section 48).
• Holding period: period held by previous owner + period held by NRI (combined). If combined > 24 months (property), gain is Long-Term Capital Gain (LTCG).
• LTCG tax rate: Finance Act 2024 changed - 12.5% without indexation OR 20% with indexation (whichever lower) for property acquired before 23 July 2024; 12.5% without indexation for property acquired after 23 July 2024.
• STCG: at slab rate.
• TDS under Section 195: buyer deducts 20% LTCG / 30% STCG from sale proceeds. Lower Deduction Certificate (LDC) available under Section 197. See our LDC guide.
• Section 54 reinvestment exemption: if NRI reinvests LTCG in another residential property in India within 1 year back / 2 years forward (purchase) / 3 years forward (construction), LTCG exempt subject to limits.
• Section 54EC bonds: INR 50 lakh in REC / NHAI / PFC / IRFC bonds within 6 months.
• Section 54F: full LTCG exemption on sale of any long-term asset (not residential property) if NRI invests net consideration in one residential property in India.

Last updated: 2026-10-15.